How to restore public confidence after the Gourock-Dunoon ferry
The Herald Letters November 22 2006
I MUST correct George Lyon, MSP (November 21), regarding his defence
of the Scottish Executive's failed tendering of the CalMac Gourock-Dunoon
ferry service. He says: "The real reason why the service to Dunoon
is under threat is owing to the then Tory Transport Minister, John McGregor,
in 1992 successfully driving through an agreement in Brussels to introduce
the Cabotage Directive, requiring every country in the EU to put their
ferry routes out to tender."
First, Mr Lyon appears to be referring to the 1992 Maritime Cabotage
Regulation (not a Cabotage Directive - that is a different legal instrument
with different implications).
Secondly, the 1992 Maritime Cabotage Regulation was only one of a catalogue
of complementary sector-specific regulations adopted by the commission
over several years, all with the objective of enhancing competition
and dealing with market-distorting state aid. It was inevitable that
the 1992 regulation, or something like it, would be imposed on this
sector, and futile and misleading to blame any individual political
party. Whoever was in power would have had to accept the 1992 regulation
or leave the EC. And that might not be a solution: Norway adheres to
a variant of the 1992 regulation through EU economic co-operation agreements.
Thirdly, contrary to what Mr Lyon says, the Maritime Cabotage Regulation
did not require every country in the EU to put their ferry routes out
to tender. Indeed, following the Altmark case a credible case could
be made that the EC laws in this area could be satisfied without the
need to tender. I put just such a case to the transport committee of
the Scottish Parliament and my case was referred to and discussed as
a possible alternative to tendering when the executive proposal to tender
CalMac was brought back to the parliament in September last year.
Unfortunately, in the debate Mr Lyon claimed that I had "admitted
on many occasions" that the alternative approach I recommended
"would end the CalMac network, individualise the routes and leave
the routes open to cherry-picking".
I wrote after the debate to the minister and all members of the transport
committee stating that that simply was not, and never had been, a fair
or true representation of my views. At the very least it was a serious
misunderstanding of my position. But it was too late to influence the
debate - by that time the vote to tender had been taken.
Fourthly, on the Gourock-Dunoon tender, Mr Lyon states: "The executive
agreed to tender the route on a commercial basis as recommended in both
Deloitte Touche and Professor Neil Kay's reports." In fact, neither
report recommended a tender, certainly not the futile and shambolic
exercise that the executive has indulged in on this route.
The executive told firms they would have to compete with no subsidy
but at the same time face a time-limited tender hedged in with a mish-mash
of unnecessary restrictions and vague specifications that were not going
to be imposed on Western Ferries, the other company in the market. Even
if the bidders sank resources into building market share back up, after
six years they would face the risk of losing the re-tender to another
Then there was the discovery in the middle of all this that the executive
had been having private meetings and correspondence with Western
Ferries on its becoming monopoly operator of vehicle-carrying on the
route; this continued even after the decision to seek an unsubsidised
commercial operator had been announced in parliament.
So it is perhaps understandable that confidence collapsed in the tendering
process. The OFT is being pressed to open an investigation into what
has gone on here. Such an investigation may be the only way that public
confidence can be restored to what has been fairly described as a shambles
and a farce.
Professor Neil Kay,